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The grey market premium (GMP) of Hyundai India continues to slide ahead of the issue opening next week. The company's shares are currently commanding a GMP of around Rs 139, indicating a marginal premium of 7% over the issue price.The IPO, which is a complete offer for sale (OFS) of 14.2 crore shares by the Korean parent, is priced in the range of Rs 1,865-1,960. At the upper end, the company is valued at Rs 1.6 lakh crore.Two weeks ago, the share price of Hyundai in the unlisted market was around Rs 570. However, analysts noted that recent market corrections and somewhat expensive valuations are contributing to a 76% dip over the past two weeks."It is true that the GMP has declined significantly due to recent market corrections. While this might dampen the enthusiasm around the IPO in the short term, it does not necessarily reflect the long-term potential of Hyundai's business," said Abhishek Jain, Head of Research, Arihant Capital Markets.This IPO will make Hyundai Motor India the first automaker to go public in two decades, following Maruti Suzuki's listing in 2003.Although the entire proceeds from the IPO will go to the parent company, management stated that the funds will be used for research and development as well as new innovative offerings.Hyundai is the second-largest carmaker in India, with a portfolio of 13 passenger vehicle models across sedans, hatchbacks, and SUVs. The company aims to leverage its strong local manufacturing capabilities to establish itself as Hyundai Motor's largest production base in Asia.It operates two production facilities in Chennai with a combined installed capacity of 824,000 units per annum and is currently running at over 90% capacity utilization.For the quarter ended June 2024, Hyundai Motor India reported a revenue of Rs 17,344 crore, an increase from Rs 16,624 crore in the same period last year. Of the total revenue, 76% was derived from the domestic market, while exports accounted for 24%.The company's net profit for the quarter was Rs 1,489.65 crore, compared to Rs 1,329.19 crore in the previous year.Kotak Mahindra Capital, Citigroup Global, HSBC Securities, JP Morgan, and Morgan Stanley are the book-running lead managers for the issue, while KFin Technologies is the registrar for the offer.

The marquee IPO of Hyundai Motor India, which will be this country's biggest public offering, could attract significant global interest and with it an influx of foreign capital. This might trigger a sector-wide re-rating for the auto industry, according to analysts.The Rs 27,870 crore IPO from Hyundai is the first from the major auto player in India in over two decades and thereby drawing a lot of eyeballs from foreign investors.Hyundai's portfolio expansion and manufacturing capabilities highlight the growth potential and investment in the automotive market. The increased competition in the auto space also means that other automakers might have to innovate and enhance their product offerings."The increased competition and innovation driven by Hyundai’s enhanced financial strength post-IPO could push other automakers to reassess their growth potential and market positioning, positively re-rating the sector," said Saji John, Senior Research analyst, Geojit Financial Services.Conversely, if the listing has been perceived as overvalued then it can negatively impact.The re-rating will be driven by increased investor interest and capital inflows into the auto sector and higher valuation multiples for auto companies, reflecting their growth potential.How Hyundai India IPO could keep listed rivals like Maruti on edgeFurther, accelerated adoption of electric and hybrid technologies propelled by heightened competition could also play a significant role in positive re-rating for the sector."This re-rating would likely be gradual and dependent on how well Hyundai and its competitors succeed in harnessing new market dynamics gained once they go public," said Atul Parakh, CEO of Bigul.Hyundai has planned an investment of Rs 32,000 crore in the country over the next 10 years as the company seeks to aggressively invest in new products, future advanced technology, and R&D capabilities in Indian operations."We expect a re-rating in the sector with the IPO debut. The re-rating would likely be driven by its strategic expansion plans, investment in new technologies and products, and prudent capital allocation. Such a rejig would intensify the competition in the sector, which would drive investor interest and valuation in the sector as a whole," said Sagar Shetty, Research Analyst, StoxBox.Hyundai's IPO will see the Korean parent selling 17.5% stake or 14.2 crore shares, valuing the Indian unit at Rs 1.6 lakh crore at the upper end of the price band.Bidding for the IPO will start on October 15 and the shares are expected to list on October 22.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Star fund manager Saurabh Mukherjea, who runs Marcellus PMS, has exited five mid and small-cap stocks and picked two new ideas: Go Digit General Insurance and Jash Engineering."We continue to make suitable changes in the portfolio (particularly the Little Champs portfolio) to create more diversity (increasing the mix of domestic vs the historical heavy leaning towards the export-oriented franchises; reducing the historical high concentration of chemical-oriented companies in the portfolio) and bring the healthy earnings growth trajectory back in the portfolios," Mukherjea said in a note to clients.In its midcap-focused Rising Giants and smallcap-heavy Little Champs funds, Marcellus has added two new stocks.Go Digit General InsuranceMukherjea said one thing that stands out in Digit’s numbers is its underwriting ability."Within 6-7 years of operations, it has been able to achieve a golden combination of scale + solid underwriting outcomes. Operations are leaner despite running a higher share of retail business which is an opex incentive and lower scale. Digit is currently at 6% in motor insurance and its overall market share in the non-life insurance sector is low at ~2.7%. In this context for Digit to grow at 1.5-1.8x industry growth is plausible, when overall market share is just 2.7%," he said.Shares of the newly listed firm have risen by about 2% in the last 3 months.Jash EngineeringJash Engineering, which manufactures water flow control equipment, including sluice gates, valves, screens, and filters, has seen its revenues grow at a 34% CAGR over the last five years.Jash has a strong reputation and is a pre-qualified vendor for most municipalities, as well as other government bodies, including the Nuclear Power Corporation, Marcellus stated.The stock is up around 43% so far in the year.Stock ExitsMarcellus has exited RHI Magnesita from both the mid and small-cap funds. Additionally, the mid-cap fund has also seen the exit of SKF India and Ratnamani Metals & Tubes, while Prudent Corporate Advisory Services and Tega Industries have been removed from Little Champs.